Innovation Strategy

Innovation at Siemens means ideas that earn money. They can be products, solutions and services that set a benchmark – both in the world of technology and beyond. We have summed this up clearly in our Mission Statement: Siemens impresses with innovations that make real what matters. The application of a systematic innovation strategy helps us move forward.

next47

next47 promotes ideas that have the potential to generate growth in Siemens' growth fields: Electrification, Automation and Digitalization. As an independent unit with a close connection to Siemens AG, next47 is tasked with identifying new trends, investing in them and developing future-oriented businesses in collaboration with innovative partners.

Taking leading positions in technology

We have taken up firm positions along the electrification value chain – which covers the transformation, intelligent transmission and distribution of energy as well as its efficient utilization. With its pronounced strengths in the automation field, the company is well placed to face the future in general and the digital age in particular.

Customer and busines focus

We deploy our technological expertise and the innovative prowess of our employees in the areas where they create the greatest value for the company. This targeted allocation of resources enables us to occupy leading positions world-wide in selected technology fields that form the foundation for innovation in long-term growth areas.

Our R&D activities are ultimately geared to developing innovative, sustainable solutions for our customers – and the Siemens companies – and simultaneously safeguarding our competitiveness. For these reasons, we focus in particular on:

guaranteeing energy supplies that are also economically sustainable;

further enhancing efficiency in the generation of renewable and conventional power and minimizing losses during power transmission;

finding novel solutions for smart grids and for the storage of energy from renewable sources with irregular availability;

promoting the efficient utilization of energy, especially in building technology, industry and transportation, e.g. through highly efficient drives for production facilities or for local and long-distance trains;

making medical imaging technology, in vitro diagnostics and IT for medical engineering an integral part of results-oriented treatment plans.

Beyond these points of focus, we recognize how important highly sophisticated software solutions are for all the fields of business in which Siemens is active.

Patent protection secures competitive edges

New technologies result in innovations, which in turn lead to competitive advantages. Without high-quality protection of patents, however, these advantages would quickly be lost. That is why some 400 Siemens employees across the globe are involved in managing the company’s portfolio of intellectual property (IP) rights.

Although Siemens occupies top positions in the key patent statistics, it is not the total number of patent applications that is decisive for our company’s success and future viability, but rather the value and business utility of our IP rights. This means that, in addition to systematically building up a strong, strategic IP portfolio, it is of crucial importance to the company to utilize those IP rights in a targeted manner and enforce them consistently.

Innovation Culture

Promoting open innovation

Today's world is faster and much more diverse than it once was. That's why Siemens is opening up – both internally and externally. As part of this evolutionary process, the company is acting as a hub in a global research network, while it brings the next generation of innovations to life.

Partnerships withuniversities and research institutes

Interchange and collaboration platforms

Crowdsourcing of ideas

Collaboration with start-ups

Investments in start-ups

Founding start-ups

Partnerships with universities and research institutes

Siemens conducts long-term research into key technologies together with universities of global renown via the CKI program (Center of Knowledge Interchange). These strategic partnerships are supplemented by individual scientific work that Siemens commissions at universities and research institutes around the world and by many publicly sponsored joint research projects.

Interchange and collaboration platforms

Who can help? Employees at Siemens can use the structure of a large group and, within seconds, request support from more than 50,000 experts worldwide. Simply by clicking on the social network TechnoWeb. The same applies to groups on the internal social network SSN (Siemens Social Network).

Crowdsourcing of ideas

For years, Siemens has also been looking for exciting ideas on public crowdsourcing platforms and in internal idea contests. One example is Quickstarter, where researchers and Siemens employees allocate money to projects that originated from their colleagues' ideas. Adequately financed ideas are implemented without any further decision by management. Nearly 300 ideas were submitted within a two year period.

Collaboration with start-ups

The globally networked technology scouts from next47 are located in Berkeley, Shanghai, Munich and soon Tel Aviv as well. They identify start-ups, which have exhibited initial successes in the innovative fields of connected (e-)mobility, decentralized electrification, autonomous machines, artificial intelligence and blockchain applications.

Investments in start-ups

next47 identifies young companies and finances them during the start-up phase. Siemens has already been collaborating with innovative start-up companies for 20 years. The company has invested upwards of 800 million euros in more than 180 start-ups thus far. next47 will have one billion euros at its disposal over the next five years.

next47

next47 promotes ideas that have the potential to generate growth in Siemens' forward-looking fields – electrification, automation and digitalization. Together with innovative partners, next47 is supposed to recognize and invest in new trends as well as develop sustainable businesses. The unit's partners include entrepreneurs from Siemens, external start-ups and established companies.

Driving forward digitalization

Digitalization is changing our economy and our society. Those companies – like Siemens – that shape these changes and develop the right business models have every chance of emerging as true winners.

Big data

Data has clearly become the global economy’s most important “raw material” – and, unlike other raw materials, it is constantly increasing in volume. According to the analysts at the International Data Corporation (IDC), the volume of digital data stored worldwide is set to grow 10-fold between 2013 and 2020.

We connect the physical and virtual worlds, thus shaping the process of digitalization. That means we tap digital technologies for our industrial base, thus enhancing customer benefit and securing our long-term success. From today’s standpoint, we expect to see long-term market growth of seven to nine percent for our software solutions and digital services. That makes our digital offerings an important focus for our innovation efforts. Beyond that, however, we need to continue digitally upgrading our traditional portfolio – i.e. our products and systems for electrification and automation – and ensure that portfolio remains competitive.

Future of manufacturing

Networked energy

Intelligent infrastructure

Healthcare IT

Digitalization extends to all businesses

To tap the potential of digitalization, Siemens will use the possibilities of the digital world to improve its hardware products for the benefit of customers. With digital services such as predictive maintenance, for example, Siemens minimizes service-related downtimes for its customers. With this approach, an availability of over 99 percent has been achieved for the Madrid-Barcelona train connection, enabling the operators to impress their passengers with outstanding punctuality.

The digital transformation encompasses all businesses, from power plant technology to electrification and automation through self-learning programs to self-diagnostics and condition-based maintenance. A good example of this are gas turbines in which hundreds of sensors measure temperatures, pressures, flows, and gas compositions. If these values are properly analyzed with the help of intelligent algorithms, we can give power plant operators recommendations on making more efficient settings for their plants and reducing emissions. The result is true added value – whether it’s to conserve energy, make operations more environmentally friendly, reduce costs, accelerate processes, or increase the reliability of plants.

The power of digitalization is most apparent in Product Lifecycle Management (PLM) software from Siemens, which already enables more than 140,000 of our customers worldwide to efficiently and cost-effectively manage all the infor-mation for the entire lifecycle of a product. PLM can be regarded both as an information tool and as a corporate strategy. As an information tool, it provides for a coherent data structure by consolidating systems. As a corporate strategy, it makes it possible for companies operating globally to develop, manufacture, and launch products as a team while documenting best practices and any knowledge gained. This means that processes are not only depicted digitally, but that digitalization is what makes them possible in the first place. When used in this manner, the consistent digital thread of knowledge becomes the primary driver for business.

We are also working intensively on other digital technologies. These include cloud computing – which makes it possible to implement products and services faster, more cost-efficiently and at lower risk – and implementation of the Internet of Things as well as associated concepts for its industrial application. As we are aware that our products are often deployed in critical infrastructures, IT security is a high priority at Siemens.

With MindSphere, Siemens interlinks physical products and production facilities with digital data. This allows for innovative solutions, making it possible to bring products to market more quickly and more efficiently, with better quality. Designed as a cloud-based, open operating system for the Internet of Things, MindSphere combines device management, simple connectivity, the necessary data storage, and the corresponding infrastructure to perform virtualized data management that can be deployed in the shortest time. Companies can use it as the basis for their own digital services, whether in the areas of predictive maintenance, energy data management, or resource optimization. Mechanical engineers and plant engineers can use the platform to monitor machine fleets spread across the world for service purposes, reduce their downtimes, and offer new business models. MindSphere also forms the basis for data-based services from Siemens, including the predictive maintenance of machine tools and integrated drive systems. MindSphere is yet another important building block of the company’s digitalization strategy, which will make Siemens the leading company for digitalization.

Pictures of the Future Method

Tapping tomorrow's growth areas

An important task of innovation management is to identify and prioritize future growth areas. The central question is this: which technological products and solutions can we use to add value for our existing customers and to tap new customer groups?

To answer this question, we systematically analyze trends that will have a medium- and long-term impact on our business activities. In doing so, we think beyond the boundaries of our company and examine promising fields of business not yet covered by our current portfolio.

Innovation strategy

Researching future trends

When researching future trends, we combine two powerful tools that can forecast future customer demand. These are extrapolation (i.e. projecting our current technologies and product families into the future) and, in parallel, retropolation (i.e. creating a vision of the future and using it to derive the tasks and problems we need to tackle today to achieve that vision). Frequently, an examination of a trend will lead to the conclusion that an entire industrial segment could be revolutionized – a process that is known as “disruption.” This knowledge helps Siemens prepare for transformational changes well in advance.

Corporate Technology, the company’s central research and development department, ensures that this systematic approach is the hallmark of the entire innovation process at Siemens. Corporate Technology develops not only new fields of innovation, but also the related prototypes for later transition to the Business Units. There, these prototypes are tailored to future market require-ments and to provide Siemens customers with the technological toolkit they need to design new products and innovative services.

Business Excellence

Faster, more agile and more efficient

Last but not least, it is important to make better use of our company’s potential through excellent business practices and thus make Siemens faster, more agile and more efficient.

For this to work, we need to optimize the entire value chain in all types of business, i.e. in the manufacture of products, in project business and in services. That applies equally to our current activities and those of the future – a future that harbors ever more challenges for the company.

Werner von Siemens

The words 'I will' have great magical power when they're seriously meant and backed by energy an resolve! Of course, you can't shy away from obstacles and detours and can't lose sight of your goal for a moment!

Werner von Siemens to his wife, Mathilde, 1854

However, Siemens will not become faster, more agile and more efficient unless all those involved are prepared to remain open to new ideas, learn to recognize the changes that are important for our own future and that of our customers, and have the courage to implement the necessary changes without any ifs or buts.

In a quickly changing competitive environment, iterative approaches, the build-up of expertise and the open, cross-divisional sharing of knowledge are of crucial importance. This is where Corporate Technology’s Business Excellence unit is paving the way.